New Delhi: India’s economy is likely to grow at 7% or more in the current financial year, aided by a strong 8% growth in the first half of the year and the cumulative effect of structural reforms, chief economic advisor V. Anantha Nageswaran said on Friday after official September quarter growth of 8.2% was announced.
Nageswaran’s assessment represents an upgrade from the 6.3-6.8% real GDP growth the Economic Survey projected for this fiscal year in February. The Reserve Bank of India’s (RBI) estimate too has been 6.8%.
“Full year growth will be 7% or to the north of 7% rather than to the south of 7%. Basically, we are saying growth rate will be at least 7% for the full year.”
Nageswaran also said the 8.2% growth in the September quarter “is outside the range of most optimistic estimates.”
The chief economic advisor said the economy’s performance reflects “the cumulative effect of the policies that have been put in place since the government returned to office in June 2024, including the significant direct tax relief in the February budget and the employment-linked incentive schemes announced and implemented since the July 2024 budget, etc.”
Prime Minister Narendra Modi said in a social media post that the 8.2% GDP growth in the September quarter “is very encouraging.”
“It reflects the impact of our pro-growth policies and reforms. It also reflects the hard work and enterprise of our people. Our government will continue to advance reforms and strengthen Ease of Living for every citizen,” Modi said.
The real GDP growth of 8.2% in the September quarter comes after the 7.8% expansion in the June quarter. Nageswaran said India’s growth continues to outpace that of other major economies, citing the examples of Indonesia, which expanded by 5%, and China, which grew by 4.8% in the September quarter.
Domestic drivers
Nageswaran said that steady domestic drivers continue to underpin growth amid softening global conditions.
“Overall, the confluence of stable inflation, sustained public capex, and reform momentum positions the economy to withstand risks,” Nageswaran said, adding that these risks include the euphoric global stock markets, which need to be watched out for.
“And of course we need to continue to look at the trade impact of tariffs on Indian exports and continue the diversification efforts,” Nageswaran said, adding that conversations are going on between India and the US on the trade front.
Nageswaran said that the concern in late August was about the negative growth impact of the US tariffs. “But right now, sitting here on 28 November looking at an 8% growth rate in the first half compared to the first half of last financial year, we are now talking about a growth rate that is either 7% or higher, and that is a good situation to be in,” Nageswaran said. It is anchored in financial stability, macroeconomic stability and fiscal prudence, he said.
India remains an important market for other countries as well, and India’s growth supports the growth of other countries, given its high consumption share, and ”we continue to import products,” Nageswaran added.
“Growth momentum is firming, driven by robust expansion in manufacturing and services, supported by festive demand and GST-led gains. Core inflation remains stable, while timely Rabi sowing and healthy reservoir levels reinforce a benign food supply outlook. The cumulative GST collection growth of 9% for the April to October period of 2025 indicates that the underlying revenue stream has remained resilient, aided by firm consumption and improved compliance,” Nageswaran stated in his presentation.
Improving price dynamics and tax reforms are expected to boost household disposable incomes, strengthening the near-term consumption outlook, and healthy corporate sector balance sheets augur well for sustained private investments in the second half of FY26, Nageswaran said.